Lecture 3 Notes - Marketing Research

MMKTGKTG 2100: 2100: pagepage 11Lecturer: Dr Doreen KumLecturer: Dr Doreen Kum

MKTG 2100Principles of Marketing

Lecture 3Information Management & Marketing Research

MKTG 2100: MKTG 2100: pagepage 22Lecturer: Dr Doreen KumLecturer: Dr Doreen Kum

The Main Role

The main role of market research

is to provide information

This allows better

decisions to be made

INFOINFO


The Importance of Information

WhyInformationis Needed

WhyInformationis Needed

MarketingMarketingEnvironmentEnvironment

StrategicStrategicPlanningPlanning

CustomerCustomer NeedsNeeds

CompetitionCompetition

Helps VALUE

CREATION!

Identify opportunities & problems

Generate & evaluate marketing actions


Marketing Research’s Central Role

(Malhotra (Malhotra et alet al, 2006, Fig 1.2, p. 9), 2006, Fig 1.2, p. 9)

MR links the consumer, customer & public to the

marketer through

information

MR links the consumer, customer & public to the

marketer through

information


= a marketer’s eyes & ears

Uses of MR

New product development Consumer trends Testing of advertising messages Choice of brand names Price setting To forecast sales …


TEST SCREENINGS: LISTENING TO CONSUMERS TO REDUCE MOVIE

RISKS

Test screenings Tracking studies


Marketing research questions asked in test screenings of movies, and

how they are used


The Marketing Information System (MIS) A marketing information system (MIS) consists of

people, equipment, and procedures… …to gather, sort, analyse, evaluate and distribute… …needed, timely and accurate information to

marketing decision makers.

MIS distributes information to managers… in the right form and at the right time to help them make better marketing

decisions Begins and ends with Marketing Managers Is not the same as Marketing Research


Marketing Marketing ManagersManagers

AnalysisAnalysis

PlanningPlanning

Implemen-Implemen-tationtation

OrganisationOrganisation

ControlControl

Marketing Marketing ManagersManagers

AnalysisAnalysis

PlanningPlanning

Implemen-Implemen-tationtation

OrganisationOrganisation

ControlControl

AssessingAssessinginformationinformation

needsneeds

AssessingAssessinginformationinformation

needsneeds

DistributingDistributinginformationinformation

DistributingDistributinginformationinformation

InternalInternalreportsreports

InternalInternalreportsreports

MarketingMarketingdecisiondecisionsupportsupportanalysisanalysis

MarketingMarketingdecisiondecisionsupportsupportanalysisanalysis

MarketingMarketingintelligenceintelligence

MarketingMarketingintelligenceintelligence

MarketingMarketingresearchresearch

MarketingMarketingresearchresearch

Marketing Marketing EnvironmentEnvironment

TargetTargetmarketsmarkets

MarketingMarketingchannelschannels

CompetitorsCompetitors

PublicsPublics

Macro-Macro-environmentenvironment

forcesforces

Marketing Marketing EnvironmentEnvironment

TargetTargetmarketsmarkets

MarketingMarketingchannelschannels

CompetitorsCompetitors

PublicsPublics

Macro-Macro-environmentenvironment

forcesforces

Marketing Decisions and CommunicationsMarketing Decisions and Communications

The Marketing Information System

Developing Information

MKTG 2100: MKTG 2100: pagepage 1010

Lecturer: Dr Doreen KumLecturer: Dr Doreen Kum

Marketing Information System

1.Assessing Information Needs

2.Developing Information

3. Information Analysis

4.Distributing Information



1. Assessing Information Needs

Info needs differ according to current problems

(Kotler (Kotler et alet al, 2006, Fig 4.2, p. 116), 2006, Fig 4.2, p. 116)



2. Developing Information

Differentiate between the three sources of information1. Internal Records2. Marketing Intelligence3. Marketing Research (see notes on

“The Marketing Research Process”)



i. Internal Records

Information gathered from sources within the company to evaluated marketing performance and detect marketing problems and opportunities.

Internal records can be obtained more quickly and cheaply than other information but may be incomplete or in the wrong form for making marketing decisions.



ii. Marketing Intelligence (MI) Everyday information about developments in the

marketing environment that helps managers prepare and adjust marketing plans.

MI is important and can be gathered from many sources including the organisation’s own personnel.

Personnel are often busy and fail to pass on important information unless there is a formal process for doing so.

The organisation needs important intelligence from suppliers, resellers and customers.



iii. Marketing Research

The function that links the consumer, customer and public to the marketer through information used to: identify and define marketing

opportunities and problems generate, refine and evaluate marketing

actions monitor marketing performance improve understanding of the marketing

process



3. Information AnalysisExamples of questions : What are the major variables affecting my sales

and how important is each one? What are the best variables for segmenting my

market, and how many segments exist? What are the best predictors of which

consumers are likely to buy my brand vs my competitor’s?

If I raised my price 10% and increasedadvertising expenditures 20%, what would happen to sales?



4. Distributing information

Information must be distributed to the right managers at the right time

Centralised marketing information systems (MIS) often provide regular performance reports, intelligence updates, and study reports to managers

Developments in technology have caused a revolution in information distribution



The Marketing Research Process This process includes:

Specifying what information is required

Designing methods for collecting information

Managing & implementing data collection

Analysing the results

Communicating findings & their implications

1. Defining theProblem & Research Objectives

2. Developing theResearch Plan

3. Implementing theResearch Plan

4. Interpreting andReporting the Findings

(Kotler (Kotler et alet al, 2006, Fig 4.3, p. 122), 2006, Fig 4.3, p. 122)



Stages of the Research Process

Zikmund, W. G. 2000. Exploring

Marketing Research 7th edition.

and so on

Development of an

Approach to the Problem

Research

Design

Sampling

Data Gathering

Data Processing

and Analysis

Conclusions

and Report

Discovery and

Definition

Problem Discovery

and Definition



1. Defining the Problem

Accurately and adequately defining the management problem is the single most important task in the MR process

It is the problem confronting management Asks what the decision maker needs to do Also called research purpose or aim

Without this, money & effort will be wasted The challenge: may be difficult

Manager may know there is a problem without knowing or understanding the cause



Issues in Defining the Problem Identify the real problem Identify what information is needed

E.g., Fab One Shot Don’t confuse the symptoms with

problems Decline in sales? Lead to asking wrong questions

Develop a list of possible problem areas, analyze situation (e.g., talk to informed people, secondary data) and narrow in What else is needed?



The first step in the marketing research process is the:

A. development of the research planB. survey of stakeholders to determine if

problems existC. decision regarding the research tools and

target groupD. collection of the available sources for

needed information E. definition of the problem and research

objectives



2. Developing the research plan; the research design Determining specific information needs

– what do we need to know? Breaking the problem down into specific

questions. E.g., How would consumers react to

Oats in microwaveable bowl? What questions do we need to ask to

determine this?



Developing the Research Plan First we look at information readily available

(secondary data): Internal sources Government publications Periodicals and books Commercial data

This may be for the purpose of further refinement of the research problem,

Or to access information relevant to the solution to the problem.

If we then require new information, then we collect primary data



Decide When MR is Warranted

MR may not be needed:

Information already available

Not enough time

Resources inadequate

Costs outweigh value

MR may be needed: Results directly affect

your product/service Identifies correct

alternative Gives you competitive

advantage Keeps you abreast of

the market

Research is a cost and a budget is a must Value of MR: does the MR contribute

towards a better decision? Is it really needed?



Secondary vs Primary Data

For Secondary Data Relevant? Accurate? Current? Impartial?

For Primary Data Research Approach Research Instruments Sampling Plan Contact Methods (garbage in, garbage out)

Primary data consist of information collected for the specific purpose at hand It costs time and money to collect You only do if secondary research has

no answers



Comparing Primary & Secondary Data

Primary Data Secondary Data

Collection purpose

Collection process

Collection cost

Collection time

For the problem at hand

Very involved

High

Long

For other problems

Rapid and easy

Relatively low

Short(Malhotra (Malhotra et alet al, 2006, Table 5.1, p. , 2006, Table 5.1, p.

138)138)



A Classification of Marketing Research Designs

ResearchDesigns

Exploratory

Descriptive

Causal

Conclusive



Three Types of Research Designs

Exploratory Research to understand...develop hypotheses…why?

e.g. What is the cause of customer dissatisfaction? observation, interviews, focus groups

Descriptive Research to measure the state…what is...?

e.g. describe market characteristics or functions

surveys, observation

Causal Research to test hypotheses

e.g. establishing cause & effect experiments



Objective:

Characteristics:

Methods:

Discovery of ideas and insights

Flexible, versatile

Often the front end of total research design

Expert surveysPilot surveysSecondary dataQualitative research

Describe market characteristics or functions

Marked by the prior formulationof specific hypotheses

Preplanned and structured design

Secondary dataSurveysPanelsObservation and other data

Determine cause and effect relationships

Manipulation of one or more independent variables

Control of other mediating variables

Experiments

Exploratory Descriptive Causal

A Comparison of Basic Research Designs

(Malhotra (Malhotra et alet al, 2006, , 2006, Table 4.6, p. 115)Table 4.6, p. 115)



Data Collection Methods

Observational research Mechanical

People metres Checkout scanners

Single-source data systems

Eye cameras Video

Personal Mystery shoppers

Survey research Structured Unstructured

Indirect approach Direct approach

Question type Closed-ended Open-ended

Experimental research



Research Instruments

Research Instruments Questionnaire

Closed-end questions Open-end questions

Mechanical devices Galvanometer Tachistoscope Eye cameras



Mechanical research instruments



Su

rvey T

yp

es

The main ways of administering surveys:

(Malhotra (Malhotra et alet al, 2006, Fig 8.2, p. 250), 2006, Fig 8.2, p. 250)



Advantages & Disadvantages

(Kotler (Kotler et alet al, 2006, Table 4.4, p. 132), 2006, Table 4.4, p. 132)



Sampling: Definitions

Sample Subset or some part of a larger group of

objects Population

Any complete group that share some common set of characteristics

e.g. restaurants in Singapore, Universities in Australia



Sampling Techniques Probability Samples

Simple Random Sample Stratified Random Sample Cluster Sample

Non-Probability Samples Convenience Sample Judgment Sample Quota Sample

See Table 4.5 for a summary



Presenting the Research Plan

Summarise the plan in a written proposal:Management problems addressedResearch objectivesInformation to be obtainedSources of secondary dataMethods for collecting primary dataHow the results will help management decision makingResearch costs



Implementing the Research Plan

Putting the plan into action involves collecting processing & analysing

the information



Interpreting & Reporting FindingsResults without interpretation are meaningless!

Both researchers and managers are responsible for interpretationsInsignificant or unexpected findings are just as important as those supporting expectations

guard against biased interpretations do not reject findings that are not as hoped



Market Research in Small Businesses (SMEs), & Non-Profit Organisations (NPOs) MR is also for SMEs & NPOs, not just large firms

MR can also be done on a small budget SMEs often use less formal approaches

Managers can conduct informal surveys using small convenience samples

Can obtain good marketing information simply by observing things around them Common technique for SME retailers

Employees a good source of customer info Can also conduct their own simple experiments Small organisations can obtain most of the secondary

data available to large businesses



Summary

1. Marketing research provides information about consumers, businesses, competitors, changes and trends in the marketplace, and other aspects of the firm’s external environment.

2. A marketing information system (MIS) consists of people, equipment, and procedures to gather, sort, analyse, evaluate, and distribute needed, timely and accurate information to marketing decision makers.

3. Steps in MR process are: problem definition, research plan,

implementation, interpretation



Summary4. Types of research designs may be classified as

exploratory - provides insights into problems. descriptive - describes market characteristics and requires

specification of who, what, when, where, why, and way of the research

causal - determines cause and effect.5. Surveys (structured and unstructured), observations and

experiments are the main data collection techniques used in MR.

6. Sampling methods include probability and non-probability techniques which are directly related to the type of research.

7. Key issues in a research plan: Research objectives, secondary information, primary data

collection methods, and costs



Lecture 3 Objectives

1. Explain the concept of the marketing information system, emphasising: ways of assessing information needs, the sources used for developing information and

ways of distributing information.2. Outline the marketing research process, including

defining the problem and research objectives and developing the research plan.

3. Discuss the key issues of: planning primary data collection, implementing the research plan and interpreting

and reporting the findings.

Documents

Lecture 3 Notes - Marketing Research